Obama Calls For ‘More Creative’ Ways to Pay For Infrastructure

At a meeting today with his outside economic recovery advisers, President Obama emphasized the importance of shoring up the nation's crumbling infrastructure but warned that the mounting federal deficit would require "more creative, new approaches to financing" investment in transit, bridges, and road repairs.

"I think my team will testify when we got several trillion dollars worth
of infrastructure that is falling apart, we need to put people to work,
doing the work that America needs done," Obama told reporters. "But we're also in an era of
fiscal constraint, which means that we've got to start finding more
creative, new approaches to financing these projects."

The economic recovery meeting comes as the White House and congressional Democrats weigh the need for stronger efforts to help stem the rising unemployment rate.

Last week's surprising announcement of 3.5 percent growth in the U.S. gross domestic product (GDP) prompted a cautiously positive response from the Obama administration, reflecting concern that job losses could continue into next year.

Transportation spending is playing a central role in that economic recovery debate, with several senior members of Congress touting its job creation potential. The Senate's No. 2 Democrat, Dick Durbin (IL), on Thursday suggested that lawmakers begin working on proposals to boost infrastructure investments, including a possible "front-loading" of the House's stalled six-year transport bill.

But with the deficit at its highest level since World War II and a gas tax increase already ruled out by the White House, what kind of "more creative, new approaches" would the president's team be prepared to support? During unrelated testimony at the House infrastructure committee on Thursday, Transportation Secretary Ray LaHood indicated that lack of funding continues to keep the issue in limbo:

The
president wants a very strong, comprehensive, robust transportation
bill... We believe
it can make a difference; we believe it'll put people to work.

But we also believe
we've got to find 4[00] or 500 billion dollars to pay for it, because
that's probably what it takes to have the kind of bill that we all want
-- that you want and that we want. We need some time to do that, to
put together a good bill and to find the money to do it.

Put simply, the same revenue gap that has surrounded the transport bill since June continues to puzzle the executive and legislative branches. The House infrastructure committee's chairman, Jim Oberstar (D-MN), has projected that his legislation would require $140 billion in extra funds over its six-year lifetime, excepting money earned from the federal gas tax.

There is certainly no shortage of creative proposals on the table; Democratic lawmakers and the White House have both urged the creation of a National Infrastructure Bank to leverage private-sector contributions, while Pennsylvania Gov. Ed Rendell (D-PA), co-chairman of the advocacy group Building America's Future, last week floated the idea of more open tolling on existing interstate highways.

Still, it's difficult to see how infrastructure spending can gain the necessary political momentum without the administration throwing its weight behind the near-term passage of a specific idea or suite of ideas -- "[putting] together a good bill and [finding] the money to do it," in LaHood's words. And if the U.S. DOT's support for an 18-month extension of existing law is any guide, that kind of specific, urgent endorsement is unlikely to come until 2011.

Since road users get most federal transportation spending, one might — at first glance — expect them to provide most of the revenue. But when Obama talks about “creative” financing, he wants to be nice to everyone and avoid politically unpopular gas taxes and tolls, which would give the Republicans a knife to slit the throats of the Democrats. He is, after all, Mr. Cash for Clunkers. So creative will mean (1) gimmicky, and (2) not specifically tied to road users. This should make the rest of us uneasy.

Ian Turner

When I hear the word “creative”, it sounds like we are looking for ways to pay for projects using debt, without actually increasing the headline debt figure.

Larry Littlefield

“When I hear the word ‘creative’, it sounds like we are looking for ways to pay for projects using debt, without actually increasing the headline debt figure.”

We have a winner!!!!!!!! Or, if you are under age 50 or cares about someone who is, a another knowledgeable loser.

Paul

Tolls and gas taxes. And when cars no longer use gas, raise the tolls and add a 100% sales tax to them. Quite simple really.

Randy

Well Im 49 and a vet I guess no more unemployment I just hope vet home will take me in

Randy

I think if Snoopy was running for president next Id vote for the DOG

http://www.livablestreets.com/people/oscarfrye oscarfrye

“creative” sounds like code word for “ripoff”

i’m also sick & tired how the discussion, on any issue (transportation, healthcare, defense, etc) is always about how to pay for something, instead of really questioning why things cost what they do, where does the money go, who profits, who rapes the system, etc. We know full well that there is waste, fraud, and corruption up & down this system, and yet the question is always “how to do we pay this massively inflated bill”?

Lucy

Creative Financing in this case means putting together various pots of public money (from HUD, DOT, HHS, EPA, etc) and then combining those with private money from the value created with the public investment. On the local level, this is not all that creative, there are lots of examples, but doing it from the Federal level is a whole new game.

If more money is needed with more taxes, there’s always the war budget to look at, with the idea that nation-building should begin at home.